Using firm-level data on offshoring of Korean manufacturers, this paper examines the relationship between firm heterogeneity and the probability of adopting offshoring. The results of the paper suggest that firm productivity may not be an important determinant for Korean firms' offshoring decision. A firm's global sourcing decision may rather depend on other characteristics such as factor intensity, research and development (R&D) intensity, information and communication technology (ICT) level, and affiliation with foreign markets when industry specificity is controlled for.


I am very grateful for helpful comments from Arianto Patunru, Iris Claus, Jung Hur, June-dong Kim, and participants at the Asian Economic Panel Meeting held in Jakarta, March 2009.

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